Markets bounce back into positive territory; trade with slender gains

In the volatile session of trade, frontline equity indices were now trading in green albeit with slender gains on lower level buying activities that lifted both Sensex and Nifty above psychologically crucial 29,500 and 8,950 levels respectively. Meanwhile, broader indices outperforming larger counterparts were trading with gains of over 3/4 th of a percent.Sentiment took a hit after the release of two somber economic data points. On the macro-front, while Fiscal deficit exceeded budget estimates by 107% in 10 months, growth in eight core industries, contributing 38% to the overall industrial production slowed down to 1.8% in January, compared to by 3.7% in January 2014 and 2.4% in December 2014. Nevertheless, sustained buying in stocks from Oil & Gas, Information Technology and Infrastructure counters aided the sentiment. Though, brutal profit-booking in stocks from Metal, Auto and Realty counters kept the gains in check.

On the global front, most Asian stock markets edged higher on Tuesday, bolstered by another record day on Wall Street. However, MSCI’s broadest index of Asia-Pacific shares outside Japan was nearly flat, while Japan’s Nikkei stock average was up about 0.4 per cent after the yen pushed to three-week lows against the greenback. Wall Street scaled fresh record high ahead of the release of Friday’s job report for February. Street widely expects employers to add 240,000 jobs in the month of February.

Closer home, the BSE Sensex is currently trading at 29503.00, up by 43.86 points or 0.15% after trading in a range of 29364.87 and 29530.69. There were 17 stocks advancing against 13 stocks declining on the index. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1442:1080; while 113 shares remained unchanged.

The broader indices were trading in green; the BSE Mid cap index was up by 0.84%, while Small cap index up by 0.97%.

The gaining sectoral indices on the BSE were Oil & Gas up by 2.28%, IT up by 0.97%, TECK up by 0.86%, INFRA up by 0.54% and Consumer Durables up by 0.46% while, Metal down by 1.19%, Auto down by 0.94%, Realty down by 0.82%, Bankex down by 0.62% and PSU down by 0.36% were the losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 3.83%, TCS up by 2.58%, Cipla up by 2.25%, Sun Pharma Inds. up by 2.08% and Dr. Reddys Lab up by 2.07%. On the flip side, Coal India down by 4.57%, Mahindra & Mahindra down by 2.66%, Axis Bank down by 2.33%, Tata Motors down by 1.73% and BHEL down by 1.50% were the top losers.

Meanwhile, the Centre and the Reserve Bank of India have signed an agreement under which the central bank will prioritise controlling price rise above the other objectives of the monetary policy, interest rates and the foreign exchange rate. Finance secretary Rajiv Mehrishi signed the agreement with Reserve Bank of India (RBI) Governor Raghuram Rajan on February 20, as per which the RBI is committed to bringing inflation below 6 per cent by January 2016. The consumer inflation target has been set at 4 per cent, with a band of plus or minus 2 percentage points, for the financial year 2016-17.

Under the agreement, the central bank will be deemed to have missed its target if consumer inflation remains above the 6 per cent level for three consecutive quarters during 2015-16 or if it remains below 2 per cent for three consecutive quarters during the year 2016-17. In case of a failure,RBI will have to specify the reasons. Similar to his counterpart in England the RBI governor will have to write a letter to the government explaining why he failed and suggest remedial actions and estimate the time period within which the target will be achieved once the corrective steps are implemented.

At the insistence of the finance ministry the agreement also said the objective of the agreement 'is to primarily maintain price stability, while keeping in mind the objective of growth.” Also, the factors such as drought or floods, which have a bearing on prices, will be factored in. Further, Finance minister Arun Jaitley has said that the RBI Act will be amended later this year to set up a monetary policy committee (MPC), which will decide on rates.

The CNX Nifty is currently trading at 8963.05, up by 6.30 points or 0.07% after trading in a range of 8925.55 and 8969.80. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 3.81%, TCS up by 2.64%, Cipla up by 2.23%, Dr. Reddys Lab up by 2.16% and  Sun Pharma Inds. up by 1.92%. On the flip side, Coal India down by 4.60%, Mahindra & Mahindra down by 2.91%, Axis Bank down by 2.42%, Ambuja Cement down by 2.28% and Tata Motors down by 1.87% were the top losers.

Asian markets were trading higher; with Taiwan Weighted trading higher by 4.41 points or 0.05% to 9,605.77; KOSPI Index trading higher by 4.57 points or 0.23% to 2,001.38; FTSE Bursa Malaysia KLCI trading higher by 4.81 points or 0.26% to 1,821.94; Jakarta Composite trading higher by 8.01 points or 0.15% to 5,485.84 and Straits Times trading higher by 19.68 points or 0.58% to 3,423.57. On the flip side, Hang Seng slid by 90.01 points or 0.36% to 24,797.43; Shanghai Composite lost 64.91 points or 1.95% to 3,271.37 and Nikkei 225 descended 11.72 points or 0.06% to 18,815.16.